Investing in rural people in MoldovaOf the Republic of Moldova’s population of 4.03 million (2016), almost 60 per cent live in rural areas. Agricultural land constitutes about 74 per cent of the country’s land area, of which 54 per cent is arable land for annual crop production. One quarter of the people in rural areas work in agriculture, with low levels of productivity. One of Europe’s poorest countries, Moldova is seriously affected by emigration, with around one quarter of its workforce working abroad.

About 90 per cent of Moldova’s agricultural production is rainfed, and crop

production (maize, wheat, sunflower, barley, oilseed, soybean and sugar beet)

is the main driver of agriculture in the country. Although the agriculture sector’s

value-added share of GDP in Moldova fell from 30 per cent in 2000 to 10 per cent

in 2009, it still employs the largest share of the workforce, and accounted for

12.2 per cent of GDP in 2016. Farm income as a share of total income declined

from 25 per cent to 13 per cent between 2007 and 2014, and poor smallholders

have little access to banks and credit facilities.

Women make up 36 per cent of the country’s agricultural holders but manage only

19 per cent of the agricultural land. Moreover, their employment rate in rural areas

(41.3 per cent) is lower than that of men (46.4 per cent).

Most farmers (97.7 per cent) are small-scale, and many lease their land to private

or corporate entities, or leave it fallow. Some large-scale farmers can exploit

the expanded trading opportunities offered by the free trade agreement with

©IFAD/Susan Beccio

the European Union (EU), which is now the country’s main agricultural export

destination. However, smallholders struggle to meet the EU’s strict requirements.

For them, the markets of the Commonwealth of Independent States, including the

Russian Federation, are vital as they are more accessible.

The government’s national development strategy for the period 2012-2020 is known

as Moldova 2020. It aims to lift 150,000 people out of poverty by 2020 through

faster economic growth and expansion of targeted social assistance. IFAD’s country

strategic opportunities programme is aligned with Moldova 2020.

IFAD’s strategy in MoldovaCollaboration between Moldova and IFAD started in 1999. The Fund has supported

six projects and one programme in Moldova, benefiting 134,808 people and with

funding totalling US$196.8 million, of which IFAD has provided US$109.2 million.

In Moldova, IFAD loans work to improve the incomes and living conditions of

poor rural people. Activities are targeted to smallholders and landless farmers,

small-scale livestock producers, rural women and unemployed young people in the

poorest areas. IFAD is also supporting reforms in Moldova, with financing totalling

US$85 million.

IFAD’s strategy focuses on promoting more resilient livelihoods in marginal rural

areas by supporting climate-smart agriculture, economic diversification, talent

retention, and access to rural finance. On that basis, the overall objective of IFAD’s

investment is to help the productive poor take advantage of the opportunities

emerging from the country’s ongoing rural transformation. IFAD’s investment is

implemented in line with the United Nations Sustainable Development Goals: no

poverty, zero hunger, gender equality, decent work and economic growth, reduced

inequalities, climate action, life on land, and clean water and sanitation. Moreover,

it reinforces IFAD’s strategic objectives for the rural poor: improve their productive

capacities; increase their benefits from market participation; and strengthen the

environmental sustainability and climate resilience of their economic activities.

South-South and Triangular Cooperation (SSTC) is an important pillar of

these efforts, especially as IFAD is supporting the Government of Moldova and

encouraging partnerships with regional countries facing the same challenges of

climate change, collective action and depopulation of rural areas. The collaboration

is implemented through peer-to-peer learning. Key activities include:

• enhancement of resilient economic transformation

• inclusive entrepreneurship finance

• project coordination, management, and monitoring and evaluation.

IFAD works to ensure projects are sustainable by sharing responsibility for their

success with poor rural people. It builds strong partnerships with government,

public agencies, research institutions and relevant associations, and coordinates

with other donors and United Nations agencies.

Over 60 per cent of Moldova’s population is rural, and 90 per cent of the country’s agricultural production is rainfed

Ongoing operations

Rural Resilience Project (2016-2022)

The project seeks to improve the well-being of the poor rural population through

strengthened resilience and enhanced economic opportunities. It does so by

improving their skills for better integration into profitable value chains, and by

improving access to climate-resilient infrastructure and microfinance services. The

rationale behind the project is that the increased competitiveness of agribusiness

should generate rural employment and increase resilience of low-income rural

people while broadening the tax base to finance the government’s poverty

reduction strategy. The project has two main components:

• Improve smallholder and agribusiness adaptive capacity, enhancing resilience

and promoting investments in productive rural infrastructure and agrisystems.

• Support agribusiness development through the establishment of the Moldova

Credit Guarantee Fund for micro, small and medium-sized enterprises, and

other measures for increasing the quantity and quality of production.

The project is intended to cover all the country’s rural areas, with the aim of

targeting climate-vulnerable farmers and agribusinesses and, more generally,

the poorest segments of the rural society. The project will have 44,145 direct

beneficiaries (17,658 households). Key target groups include, among others,

semi-subsistence and commercially oriented smallholder farmers, young

entrepreneurs, and climate-vulnerable, poor smallholder women farmers.

The total cost of the project is US$38.74 million. IFAD has provided a loan for

US$18.2 million and a US$0.5 million grant, with a grant of US$5 million from

the Adaptation for Smallholder Agriculture Programme. The government will

contribute US$2.94 million and beneficiaries US$9.51 million, while

participating financial institutions will provide about US$2.57 million.

To make investments more effective and sustainable, IFAD’s work is aligned with Moldova’s development strategy of poverty reduction and economic growth

Contact:Jijyan VrejCountry Programme Manager for Moldova Near East, North Africa and Europe DivisionInternational Fund for Agricultural DevelopmentE-mail: v.jijyan@ifad.org

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AD

/Sus

an B

ecci

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Inclusive Rural Economic and Climate Resilience Programme (2013-2020)

The goal of this programme is to enable poor rural people to raise their incomes

and strengthen their resilience. To achieve this, it will increase investments in the

rural economy and strengthen climate-adaptive capacity for the poorer sections of

society, leveraging experience from past interventions and introducing innovations.

It has three components:

• Climate change resilience and inclusive value chain development

• Inclusive rural finance and capacity development

• Infrastructure for rural resilience and growth.

The programme area comprises the most deprived areas of Moldova. Given the

size of the country and the relatively small regional differences in rural poverty

rates, the programme will cover all of Moldova’s rural areas – with the exception

of climate change resilience interventions, which focus on more vulnerable

areas, predominantly in the central and southern districts. The target population

encompasses poor men and women who have the potential to take advantage

of improved opportunities for agricultural production and other rural income-

generating activities.

The total cost of the programme is US$46.3 million, which includes a loan

worth US$16.1 million from IFAD, and a US$7.52 million loan from the Credit

Line Directorate. The government is contributing US$3.5 million and beneficiaries

US$7.5 million. Participating financial institutions are providing around

US$1.9 million, while the Global Environment Facility is giving a grant worth

about US$4.26 million, and Danida is financing a grant of US$5 million.

IFAD has invested in rural

people for 40 years, empowering

them to reduce poverty, increase

food security, improve nutrition

and strengthen resilience.

Since 1978, we have provided

US$20.4 billion in grants and

low-interest loans to projects that

have reached about 480 million

people. IFAD is an international

financial institution and a

specialized United Nations

agency based in Rome – the UN’s

food and agriculture hub.

International Fund for Agricultural Development

Via Paolo di Dono, 44 - 00142 Rome, Italy

Tel: +39 06 54591 - Fax: +39 06 5043463

Email: ifad@ifad.org

www.ifad.org

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January 2019